It’s the story that’s front and centre of the coffee world today, appearing everywhere from industry-specific online magazines right the way through to global finance websites and every other news entity in-between. We are of course referring to Peet’s Coffee & Tea’s takeover of the popular third-wave chain Stumptown.
“It is with great enthusiasm that we welcome Stumptown to the Peet’s family,” said Dave Burwick, the CEO of Peet’s Tea & Coffee. “Stumptown is an innovative leader in premium and cold brew coffee, and we’re excited to support and further elevate their presence while extending their reach to more consumers.”
So has Stumptown sold out?
Maybe, but then again maybe not.
What we do know is that Stumptown will continue to trade under its own brand but will be able to call upon Peet’s “resources and scale”.
Obviously, this means that we could see a fair few new stores pop up in the near future, making the brand much more accessible to the vast majority of the American population. Currently Stumptown has just ten physical sores in major cities such as Los Angeles, New York, Portland and Seattle, as well as operating roasteries out of those locations.
We also know that Stumptown coffee won’t be sold in Peet’s stores and vice versa – thanks to some extremely careful wording – and that the two brands will likely be kept apart as much as possible.
Stumptown have enjoyed much success in recent years, partly down to the proliferation of cold-brewed coffee and partly due to the expanding role that speciality coffee is enjoying at the moment. Naturally, they’re completely different to what Peet’s offer.
So have Peet’s bought in?
It seems that way.
Peet’s Tea & Coffee has been on a little spending spree as of late. Last year they purchased another California-based company, Mighty Leaf Lea, and have expanded their presence into Chicago and Washington D.C.
The higher ups at the company appear to be big fans of Stumptown too, which really helps in matters like this. Dave Burwick, the chief executive of Peet’s, said this recently about the success of cold-brew: “In about 2011 or 2012, when Stumptown first produced this stubby bottle that was the first cold-brewed ready-to-drink product, we knew [they] were onto something.”
There’s also a fair amount of mutual respect in the deal too. An article in Esquire revealed that Duane Sorenson, the founder of Stumptown, once worked at a Peet’s store in Portland where he met Doug Welsh, the current roast master at Peet’s.
Back in May reports emerged online that Stumptown’s majority owners, TSG Partners, could be looking to part with its stake in the company. So with TSG wanting to sell and Peet’s owners JAB Holding Company, which also owns Caribou Coffee and a percentage of Jacobs Douwe Egberts, looking to buy, the timing seems to have been perfect.
It’s worth remembering that fellow third-wavers in Intelligentsia are looking for private equity and that Blue Bottle Coffee have attracted multi-million dollar investments, so this isn’t an isolated incident.
The financial details of the agreement have not been made public.